Forest Park Medical Center Fort Worth was shut down late Tuesday and most of its employees laid off as Texas Health Resources wraps up its purchase of the bankrupt doctor-owned, luxury hospital on the city’s west side.
An employee at the door of the mostly dark hospital this morning confirmed that because of the sale most of the hospital’s employees were let go Tuesday at about 4 p.m. and the emergency room was shut down. All of the hospital’s patients had been discharged.
Forest Park hospital’s outgoing managers shut down operations on Tuesday because they expected the sale to close, said Jeff Prostok, one of their bankruptcy attorneys. He said he now expects the deal to be completed Wednesday, opening up a new chapter for the facility.
“We are ceasing operations. We are in a layoff situation,” Prostok said. “We thought it (the sale) would happen yesterday and it will happen today. We let the folks go because there really wasn’t anything for them to do. We didn’t want them around doing nothing.”
Arlington-based Texas Health Resources is paying $116.5 million for the the 54-bed, state-of-the-art hospital, an 80,000-square-foot office building next door and a multi-level parking garage. It won a bidding war that took place in bankruptcy court earlier this month.
Texas Health Resources will also shell out $4.5 million to the hospital’s management team, with $1 million set aside to settle claims and establish benefits for its employees, Prostok said. He said they are working on a severance package for staff members who aren’t hired later by the new owners.
Court records show that the Forest Park facility employed 175 people, including 115 full-time employees and 60 part-time employees.
Texas Health is in the final stages of closing on the property and we expect the closing to be completed soon.
Barclay Berdan, THR’s chief executive officer
Officials at Texas Health Resources were reluctant to comment on the hospital’s closing and remained mum on what their plans are for the hospital, which opened about a year and a half ago.
“Texas Health is in the final stages of closing on the property and we expect the closing to be completed soon,” Barclay Berdan, THR’s chief executive officer, said in a statement.
Forest Park Fort Worth’s closure did not present a problem for the MedStar ambulance service because it rarely, if ever, took patients to the hospital because it was very narrow in the kind of patients it would handle, said spokesman Matt Zavadsky.
“The patients they wanted brought there were fairly limited..,” Zavadsky said. “So its closure has little to no impact on MedStar or the patients that we serve.”
The Fort Worth Forest Park hospital may be closed “for a period of several weeks or months” during the ownership transfer, according to court records. But an attorney representing Texas Health Resources said during a court hearing that the company does not “want the hospital to go dark.”
Texas Health Resources owns 24 hospitals in North Texas including Texas Health Harris Methodist Hospital in the city’s medical district near downtown, and Texas Health Harris Methodist Hospital Southwest, located to the south. Both facilities are about five miles away from Forest Park hospital in Fort Worth.
Methodist Health System in Dallas also bid for the financially-troubled hospital. The Dallas hospital chain already purchased the Forest Park hospital in Southlake for $17.6 million, including debt.
Forest Park Medical Center Fort Worth is located on 7 acres of the Edwards Ranch property. It was part of a chain of upscale hospitals built to offer patients swankier surroundings and a more personalized approach.
But what really set the Forest Park model apart was a business model that had the hospital seek wealthier patients with private insurance and not Medicare and Medicaid medical coverage under the Affordable Care Act. Ultimately, that approach led to the hospital chain’s downfall.
Last year, Jim Davis, then CEO of Forest Park Medical Center Fort Worth, said that his hospital had been “in-network” and accepting “all patients that come through the door.”
I think that it was a fabulous outcome for everybody that has been involved in this case.
Melissa Hayward, attorney for FPMC Fort Worth Realty
When FPMC Fort Worth Realty, the owner of the real estate, filed for Chapter 11 bankruptcy last year, it listed assets of $100 million to $500 million and liabilities of $50 million to $100 million. Eventually, an appraisal set the property’s value at $122 million. Sabra Texas Holdings, part of the Sabra Health Care REIT of Irvine, Calif., posted the property for foreclosure after the hospital missed an interest payment on a $66.8 million construction loan.
Originally, Texas Health Resources had hoped to buy Forest Park Medical Center Fort Worth for $112 million by making that the qualifying bid. But Methodist Health Systems, which had made an earlier offer of $107 million, wanted the bids to include cash and noncash considerations.
U.S. Bankruptcy Judge Mark Mullin pushed FMPC Fort Worth Realty into accepting a sales procedure that didn’t make the $112 million a requirement for bidding, a decision that eventually saw the bids for the real estate part of the sale grow until $116.5 million became the winning offer.
“I think that it was a fabulous outcome for everybody that has been involved in this case,” said Melissa Hayward, the attorney representing FPMC Fort Worth Realty. “We were very pleased with the results of the auction and that all of the parties were able to reach an amicable agreement. ... It was a fabulous result for the hospital.”
“Under the circumstances, it is a good result,” Prostock said. “The auction did produce a competitive result, a higher offer.”
This report includes information from the Star-Telegram archives.